20161024-兴业证券-Weekly_A-share_Market_Recommendations_13页_385kb

Weekly A-share Market Recommendations Summary

Core Content Overview

This document presents weekly stock recommendations from the Industrial Securities Research Institute dated October 24, 2016, focusing on several sectors including Construction, Automobile, Hardware, EV, Fodder, TCM, and Banking. It provides EPS forecasts, rating recommendations, company profiles, and market data for each listed company, along with investment highlights and potential risks.

Top Stock Recommendations

Investment Highlights by Sector

Construction (ARTS Group)

• ARTS Group is expanding its regional presence and has acquired ECD to boost operations in the southwest.
• The company is exploring new businesses combining VR with architectural construction.
• EPS forecasts: CNY 0.50 (2016), CNY 0.61 (2017), CNY 0.67 (2018).
• Potential Risk: Sharp government investment slump or slower-than-expected contract signing.

Automobile (SAIC Motor)

• SAIC Motor's JV-brand vehicles are recovering, with the Roewe RX 5 model contributing to earnings.
• The company expects significant earnings improvement in 2016 for both self-owned and JV brands.
• EPS forecasts: CNY 2.85 (2016), CNY 3.00 (2017), CNY 3.17 (2018).
• Potential Risk: Passenger vehicle industry downturn or weak new product sales.

Hardware (Shenzhen Laibao Hi-tech)

• The company leads in OGS touch panel manufacturing and has diversified into AIO PCs.
• Revenue rose to CNY 1.29 billion in H1 2016 with a net profit of CNY 67.36 million.
• EPS forecasts: CNY 0.28 (2016), CNY 0.42 (2017), CNY 0.62 (2018).
• Potential Risk: Disappointment in two-in-one laptop demand or changes in touch technology roadmap.

Expressway (Shenzhen Expressway)

• The company has stable earnings from mature roads and receives significant government subsidies.
• Market cap is valued at CNY 30.8 billion, with current price at 40% discount to fair value.
• EPS forecasts: CNY 0.92 (2016), CNY 1.06 (2017), CNY 1.13 (2018).
• Potential Risk: Slower traffic flow or lower returns from new expressways.

EV (Guangdong Highsun Group)

• The company is expanding into the electric vehicle sector and has strong traditional business performance.
• It has a stable cash flow and is a leading fodder producer, potentially undervalued.
• EPS forecasts: CNY 0.77 (2016), CNY 1.01 (2017), CNY 1.12 (2018).
• Potential Risk: Natural disasters or overseas political risks.

Fodder (Guangdong Haid Group Company)

• The company maintains fast revenue and earnings growth despite industry slow-down.
• It benefits from material cost reductions and has a solid foundation for M&A.
• EPS forecasts: CNY 0.77 (2016), CNY 1.01 (2017), CNY 1.12 (2018).
• Potential Risk: Lower-than-expected growth in the poultry-raising industry.

Agriculture (Xinjiang Western Animal Husbandry)

• The company is a leading cow farmer with resilient earnings.
• Global raw milk prices are recovering, but cash flow remains a concern.
• EPS forecasts: -CNY 0.22 (2016), CNY 0.47 (2017), CNY 1.54 (2018).
• Potential Risk: Major epidemics or lower milk production.

TCM (Zhangzhou Pientzehuang Pharmaceutical)

• The company focuses on TCM and modern distribution systems.
• It is developing innovative products and has made progress in international cooperation.
• EPS forecasts: CNY 1.00 (2016), CNY 1.28 (2017), CNY 1.55 (2018).
• Potential Risk: Slower sales growth after price markup or poor performance of innovative products.

Banking (Bank of Nanjing)

• The bank benefits from interest rate declines and has a strong client base with good creditworthiness.
• EPS forecasts: CNY 2.58 (2015), CNY 3.04 (2016), / (2017).
• Potential Risk: Systematic risk in the banking industry.

Key Information

• The report emphasizes EPS growth forecasts and rating recommendations for each company.
• STRONG BUY ratings are assigned to several companies, indicating strong growth potential.
• BUY ratings are given to companies with more moderate growth expectations.
• Each company's sector is clearly defined, and investment highlights focus on business expansion, technological innovation, market recovery, and financial performance.
• Potential risks include economic downturns, government policy changes, technological shifts, market competition, and external factors such as natural disasters or political risks.
• The market data includes closing price, total shares, shares outstanding, market cap, net assets, total assets, and BVPS, providing a comprehensive view of each company's financial status.

Disclaimer and Legal Information

• The report is issued by Industrial Securities Research Institute and is intended for clients only.
• The views and recommendations are based on due diligence and professional research.
• The report may contain conflict of interest notes, especially where the company is a client of Industrial Securities.
• Unauthorized redistribution or use of the report is prohibited without prior written consent.